Alibaba: Bullish On Cloud, International Digital Commerce And Margin Expansion (Archive)
Alibaba’s cloud, international commerce and logistics engines are igniting a profitable turnaround.
This 5-Minute Pitch was originally published on Seeking Alpha before the launch of the Hunting Alphas website. It is shared here to showcase my previous work and track record. New 5-Minute Pitches published on this site will not be disseminated anywhere else.
Elevator Pitch
- I have stayed on the sidelines for Alibaba. But now despite Q1FY25's lackluster revenue growth and no margin improvement, I am joining Wall St and Michael Burry as a bull.
- There are some growth shoots in Cloud and AIDC, driven by customers' increased budgets for AI-related cloud computing spends and an improved platform experience, respectively.
- My confidence in margin expansion is higher now as management has indicated a greater focus on monetization with a clearer timeline of 1-2 years to achieve breakeven in unprofitable businesses.
- With these growth and margin catalysts, I believe it is an opportune time to capitalize on the discounted valuations, especially since the technical signals also point bullish.
- Chinese Retail Sales are a key macroeconomic monitorable to adjudge the health of BABA's largest but currently stagnant China Commerce segment.
Read the full article here.
Disclosures and Disclaimers
Past performance ≠ future results. Not investment advice. See full Disclaimer.
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